Hitting Parents Where It Hurts: Cutting Student Loans

With a 14-year-old daughter (the TeenWonk) rapidly approaching college age, anytime anyone mentions anything about paying for college, they have our undivided attention.

Even though the cost of college is going up much faster than the rate of inflation, the federal powers-that-be have decided to cutback on the student loan program and raise the interest rates for those who do get loans. Here's a sample; think about reading the whole article:

While many congressional Republicans are touting the final passage of the federal budget as fiscally responsible, including a $12 billion cut of federal student loans, opponents are emphasizing the reality for students: Most will lose money.

In a narrow 216-214 vote, the U.S. House of Representatives finalized the legislation on Feb. 1, sending it to the desk of President George W. Bush, who is expected to sign it. Members of Congress passed the bill in hopes of reducing the federal deficit by $50 billion.

“The [legislation] represents an important first step in addressing the federal government’s fiscal troubles,” stated John Boehner (R-Ohio), the former Education and Workforce Committee chairman and new House majority leader, in a press release. “Our ability to generate new job opportunities, provide for a strong defense and meet unforeseen fiscal challenges will be severely compromised if we don’t address the fundamental problem of runaway entitlement spending.”

The plan will raise interest rates for student loans. Parent PLUS loans, currently at 6.1 percent, will increase to an 8.5 percent fixed interest rate. Stafford loans will have a 6.8 percent fixed interest rate starting in July, a jump from the current 4.7 percent in-school rate and 5.3 percent out-of-school rate.

Considering all the pork-barrel boondoggles that our won't-use-a-veto-pen-to-save-his-life President and once-fiscally-responsible-but-no-more Republicans in Congress continue to spend throw away taxpayers' money on, I find the cutting of the student loan program particularly egregious.

Once again, the virtual-incumbents-for-life in Washington have given America's middle class another kick in the shorts.

Thanks for nothing, federal government. ---------------------------------See this week's Carnival Of Education right here and our latest education-related posts over there.